Nine in 10 Bank of England staff handed bonuses as inflation soars

Nine in 10 employees at the Bank of England were handed bonuses last year even as inflation soared beyond its 2pc target.

A total of 4,263 workers, accounting for about 90pc of its workforce, received a bonus last year, disclosures show. The highest payouts were between £15,000 and £20,000, with 34 members of staff getting rewards in this range.

More than 300 employees received a bonus between £10,000 and £15,000 and 1,733 were awarded between £5,000 and £10,000. In total, the central bank spent £23m on variable compensation last year.

The disclosures are likely to heighten scrutiny of the central bank and leave it open to accusations of rewarding failure. Inflation has soared to a 40-year high over the last year, crossing the Bank’s 2pc target in May 2021 and hitting 9.4pc in June.

July’s data, due on Wednesday, is expected to show price rises accelerated to 9.8pc and Threadneedle Street expects inflation to peak above 13pc later this year.

Andrew Bailey, the Governor of the Bank of England, was heavily criticised earlier this year after telling workers not to ask for high pay rises because inflation had to be kept under control. Mr Bailey, who is not eligible for a bonus, earned £597,592 last year.

Liz Truss, foreign secretary and frontrunner in the Tory leadership contest, has said she wants to review the mandate of the Bank of England in light of soaring inflation.

The Governor has defended the central bank’s independence but has told the Chancellor, Nadhim Zahawi, that he would be “open to a review”.

Bank of England officials say the vast majority of its staff do not work on monetary policy. The Bank of England declined to comment on its bonus policy.

The total bonus pot was the highest level for at least two years, the Observer first reported, though the number of employees has also increased.